Oil & Gas Policy

At the end of last month, the Department of Defense (“DoD”) issued a class deviation to implement Section 2821 of the National Defense Authorization Act for Fiscal Year 2020 (“FY20 NDAA”), which seeks to reduce dependence on Russian energy by prohibiting the acquisition of energy sourced from inside Russia for DoD’s main operating bases in Europe.  The Section 2821 restriction is an expansion of earlier limits enacted by Congress on the use of Russian energy in DoD’s European operations.  Section 2821 is broader in scope than the earlier limits, and while it does contemplate that DoD may waive the prohibition in certain circumstances, the waiver process is demanding.  Contractors with a focus on supplying energy to DoD or supporting its missions in Europe should be familiar with the Section 2821 restriction and the new class deviation.
Continue Reading Targeting DoD’s Reliance on Russian Energy

The Department of Energy proposes to no longer subject LNG exports to evaluation under the National Environmental Policy Act (NEPA).  According to a recent Notice of Proposed Rulemaking (NOPR), DOE says that the only source of potential environmental impacts within its authority to review are those associated with transporting natural gas by ship, and those shipments qualify for categorical exclusion from NEPA review.
Continue Reading DOE Proposes to Stop Evaluating Environmental Impacts of LNG Exports

The Department of Energy (“DOE”) is proposing to extend to December 31, 2050 the standard twenty-year term for authorizations to export natural gas and liquefied natural gas (LNG) from the U.S. lower-48 states.  According to DOE, the longer term would better match the operational life of LNG export facilities, provide more security in their financing, and maximize the ability to contract for exports.  This change in DOE policy will be of interest to gas and LNG export authorization holders and their counterparties in sales contracts, and to proposed export applicants that are now seeking or will seek such authorizations from DOE.
Continue Reading DOE Proposes to Lengthen LNG Export Terms

DOE’s authorizations to export natural gas, including LNG, from the U.S. impose reporting requirements regarding the destination of the exported gas and certain contracts regarding its supply and sales.  DOE recently modified one of those requirements in a significant way and proposed sharper guidelines for complying another to minimize regulatory burdens and reduce administrative uncertainty.  These changes in DOE policy will be of interest to LNG export authorization holders and their counterparties in gas sales contracts, and to proposed LNG export projects that are now seeking or will seek such authorizations from DOE.
Continue Reading DOE Drops “End Use” Requirement From LNG Export Reporting

The recent decision by the Bureau of Land Management (BLM) to remove hundreds of thousands of acres of federal land from its December 13th oil and gas auction is at least a temporary victory for environmentalists, whose efforts to protect the Greater Sage Grouse have led them to challenge the Trump administration’s policy of accelerating drilling on public lands.
Continue Reading BLM Drops Sage-Grouse Habitat from Oil & Gas Auction

The Department of Energy (DOE) recently acted in two separate orders to clear the path for small volume exports of LNG and allay concerns about the durability of its export authorizations.  In July, 2018, DOE adopted a rule to streamline its standards and process for approving small-scale LNG exports.  In a separate policy statement issued in June,  DOE put to rest industry concerns that it may rescind LNG export authorizations, stating firmly that it “does not foresee a scenario” under which it would rescind an authorization to export LNG.  For current and future investors in LNG export projects and their customers, these two developments appear to underscore DOE’s commitment to removing unnecessary barriers to LNG exports.
Continue Reading DOE Fast Tracks Small Scale LNG Exports and Provides Assurance on Export Orders

On June 21, 2018, the European Commission (“Commission”) started a new investigation to determine whether so-called destination clauses in Qatar Petroleum’s liquefied natural gas (“LNG”) supply contracts with European buyers infringe the European Union (“EU”) antitrust rules.
Continue Reading European Commission Launches New Antitrust Investigation into LNG Destination Clauses

The International Energy Agency (IEA)’s latest monthly market report, published on November 13, 2015, revealed that the already “massive cushion” of oil stockpiles has inflated further to reach a record level of almost 3 billion barrels.  Following the announcement, oil prices reportedly dropped to a two-month low.

The IEA described this stockpile as “an unprecedented buffer against geopolitical shocks or unexpected supply disruptions.”  The glut in oil supplies is expected to maintain pressure on global oil prices, which many analysts predict will remain at the lower end of a $54-$64.0/bbl range during 2016.

In this post, we highlight two observable trends in the M&A activities of industry participants during 2015 as they navigate the current challenges facing the sector.


Continue Reading What’s the Deal with Low Oil Prices?

Our Risk and Reward in the United Kingdom Continental Shelf (“UKCS”) series has reported on the challenging times recently faced by the UKCS oil and gas industry.  The past week has seen positive developments in the form of newly awarded exploration licences and the first modest improvement in the…
Continue Reading Risk and Reward in the UKCS: Recent Positive Development